True to history, we are already seeing a spike in sales for this month. In just the first 17 days we already have 20% more homes under contract than last March. That’s very exciting news. On the other hand, what we also have is over a year of inventory.

The basic principle of supply and demand just simply will not allow prices to rise. Inventory is too high for the number of buyers in the market. Prices will continue to be affected.

I’ve been saying for 5 years, that if you want to wait for prices to go up to sell your home, you’ll be waiting at least 3 to 5 years. Well, after 5 years, prices still haven’t gone up. So now, I’m saying 7 to 10 more years. Sadly, it’s just going to take that long based on the statistics.

Real estate is a long-term investment. If you’re in the market to buy now and plan to own the home for 10 to 20 years, don’t worry. You’ll be fine.

If you’re still on the fence about selling, just consider the cost to own your home for the next 10 years, versus pricing it to sell now. Then ask yourself a very serious question…Is it more important to get your price, or to get the home sold? Exactly how much longer do you want to own this home? If you’re waiting on price, it could be a while.

If I can help you answer any questions about buying or selling, please let me know.

2015 was a good year for real estate. Overall the market finished with an 11% increase in the number of homes sold. While we still have some work to do, there are very good signs for a lot of the area.

Northern Beaches – Corolla & Duck

Leading the category of still in much need for improvement is Corolla. Not far behind is the Town of Duck. The main reason these markets are still showing huge inventory levels and decreasing prices is the lack of a primary market. In these two locations, 99% of sales are discretionary. These sellers don’t HAVE to sell and the buyers don’t HAVE to buy. They are secondary homes. Without a primary market to stabilize things, the inventory in both areas has remained out of control.

It will be interesting to see how long it will take to get inventory levels to a normal absorption rate of 6 months or less. It certainly won’t happen quickly. I think the most notable stat to recognize is the 25% increase in the number of homes sold for Corolla last year. That’s interesting because in most of 2015 there was a 20 to 21 month supply of homes for sale. Even AFTER a 25% increase in homes sold, there is STILL TODAY a 19 month supply of homes for sale. Let that sink in for a minute.

2013

2014

2015

Corolla

Total Sold

171

158

197

25%

Avg Days on Mkt

267

271

250

Avg List Price

$667,649

$728,310

$737,450

1%

Avg Sold Price

$621,037

$683,375

$698,122

2%

Currently Available

291

Average Price

$849,894

You’ll notice a slight increase in average sold price above. Yet, I mentioned that prices are still dropping. How can that be? If we look a the breakdown below, you’ll notice there were fewer homes sold under $500,000 and more homes sold over $500,000. That can skew the average price. What we do know is the average home in Corolla goes through 3 price reductions before selling, as well as over 200 days on the market. Both are signs of continued price decline.

2014

2015

Under $350,000

28

18%

35

18%

$350,001 – $500,000

50

32%

57

29%

$500,001 – $700,000

36

23%

51

26%

$700,001 – $1M

22

14%

29

15%

$1M – up

22

14%

25

13%

2013

2014

2015

Duck

Total Sold

82

76

75

-1%

Avg Days on Mkt

254

218

251

Avg List Price

$776,662

$781,055

$661,670

-15%

Avg Sold Price

$714,076

$728,505

$619,861

-15%

Currently Available

150

Average Price

$687,000.00

What’s interesting for Duck is the very clear shift in lower priced homes selling. The jump in homes sold from $350,000 to $500,000 was massive! Notice also, the drop in homes sold in the higher priced categories.

2014

2015

Under $350,000

13

17%

12

16%

$350,001 – $500,000

15

20%

25

33%

$500,001 – $700,000

18

24%

13

17%

$700,001 – $1M

20

26%

18

24%

$1M – up

10

13%

7

9%

Southern Shores

Going into 2015, Southern Shores was showing great numbers. I’m not sure what changed throughout the year, but they didn’t end as strongly as they started.

2013

2014

2015

Southern Shores

Total Sold

70

96

97

1%

Avg Days on Mkt

202

192

235

Avg List Price

$541,660

$519,143

$470,721

-9%

Avg Sold Price

$511,185

$487,978

$444,475

-9%

Currently Available

78

Average Price

$653,286.00

Another Town with a huge increase in homes selling under $350,000 and a drop in sales of those higher priced. Very interesting to see what will take place in 2016 for Southern Shores as it’s still a very sought after location.

2014

2015

Under $350,000

29

30%

44

45%

$350,001 – $500,000

36

38%

28

29%

$500,001 – $700,000

19

20%

15

15%

$700,001 – $1M

7

7%

8

8%

$1M – up

5

5%

2

2%

Southern Beaches – Kitty Hawk, Kill Devil Hills and Nags Head

You’ll notice quite a few differences with these Town stats than the northern beaches. Once again we go back to having a primary market. These areas have been largely helped and stabilized for that reason.

2013

2014

2015

Southern Beaches

Total Sold

411

384

440

15%

Avg Days on Mkt

211

175

170

Avg List Price

$343,527

$368,743

$361,164

-2%

Avg Sold Price

$324,716

$353,107

$345,177

-2%

Currently Available

394

Average Price

$497,639.00

The major news in the southern beaches for price range stats is the increase in homes selling from $350,000 to $500,000. The rest remained fairly unchanged.

2014

2015

Under $350,000

278

72%

303

69%

$350,001 – $500,000

49

13%

79

18%

$500,001 – $700,000

30

8%

39

9%

$700,001 – $1M

17

4%

10

2%

$1M – up

10

3%

9

2%

It’s my expectation that we will see similar numbers in 2016. I’m not predicting another year with double digit increases in number of homes sold. However, it would be lovely to see some serious stabilization in pricing for the northern beaches. I’m not sure that’s possible with the oversupply of inventory, but it’s on my wish list!

If I can help you with buying or selling on the Outer Banks, let me know!

Ilona was licensed in the late 1990’s and became sales manager for Beach Realty in 2002. In 2006, she moved to Richmond, VA and was affiliated with a national coaching company where she excelled as a one-on-one coach for real estate professionals. The allure of the Outer Banks brought her back to the beach and she resumed her career in real estate sales. She quickly became a top producer and attributes her success to hard work, discipline and in-depth knowledge of the local market. Along with her successful career in real estate sales, Ilona also offers training and coaching to the sales team at Beach Realty & Construction.

We saw a lot of very positive signs in 2015 that continue to lead us on the path to recovery. While we still have an oversupply of inventory on the market, keeping prices down, we have a double digit increase in number of sales.

The other interesting trend is showing more homes in the higher price ranges are selling and fewer homes offered in the under $300,000 price range. That is showing our median sales price to be up, even though individual home prices aren’t rising at this point.

It’s virtually impossible for our home values to go up when inventory is still at a 15 month supply. However, it’s a great step forward. We saw a 20% increase in number of sales for 2012, then it steadied for 2 years until another big increase in sales for 2015.

Mortgage brokers are expecting a surge in activity the first part of 2016 to beat the Fed’s promise of rising interest rates. We certainly have a year round market on the OBX and see great activity all year long. The two spikes in activity happen in March/April and September/October. No need to wait though, we can get your home sold any time of year.

Here is the breakdown of where we ended up for 2015:

Residential number of sales were up 11%

Average sales price was down 2%

Land sales numbers were down 5%

Average sales price was up 7%

Inventory was down 8%, being the lowest since 2007

Foreclosed home sales were down 37%

Next month I’ll provide a break down of each location individually so you can see how it compares year over year.

If you have any questions or would like additional information please let me know.

Currituck County’s PRELIMINARY updated flood maps have been released. Information pdf on how to access the site. The link will take you to the flood map FRIS page, click on ok and then select the County (Currituck).In the upper right corner you will see “effective”. Go there and select “preliminary”. You will be able to look at the new proposed maps that will hopefully be adopted within the next year.

If you zoom in, you will start to see aerial views. By clicking on the map in a particular area you will get the information on the right side of the screen or you can search by using magnifying glass on menu at top left. Most of our county is seeing a significant change to elevations being lowered and many homes will come out of the flood zones or be classified into a lower zone (VE to AE for an example According to the NC Floodplain Mapping Office, the preliminary maps show that Currituck County has 11.5 square miles of V Zone (89.5% decrease from current maps) and 249.5 square miles of A Zone (24.75% increase):

‪Under current mapping, there are 1,097 buildings in the V Zone; new maps show 126 buildings in the V Zone;

‪Current maps show 7,020 buildings in the A Zone; new maps show 2,767 buildings the A Zone.

There are oceanfront V Zone properties that are coming completely out of the special flood hazard area – being changed to an X Zone!

Please keep in mind that these are only preliminary maps. They will have to undergo a 90-day appeal process, a public meeting process and final FEMA approval. This entire process could take up to 18 months. In the meantime – good news overall for homeowners in the special flood hazard area!

It’s still 70 degrees here in Corolla today! Almost mid November and it’s very warm. Also SMOKING HOT is real estate market activity! Pending sales are up 56% from last year. That means there are more properties under contract right now than this same time last year.

However, most importantly to note, prices are NOT up. In fact in some markets, like Corolla, they have still declined. Other areas remain virtually unchanged. So we are selling more houses for the same or less money. That’s not a terrible thing, because it means we are stabilizing. That’s a good sign, since it’s a necessary part of a recovery.

Let’s remember, the majority of home sales on the Outer Banks are to buyers who don’t live here. That means it is a discretionary purchase, which will cause our recovery to naturally be slower than those year round markets. This is nothing new. The same thing happened when the real estate market crashed in the late 80’s. It was almost 1999 before things recovered.

Distressed property sales are down 30% from last year. So the truth is those sales are no longer a factor and are certainly not what’s holding back prices. The main issue is STILL supply and demand. We have a whopping 16 months worth of inventory on the market right now.

That means if nothing new came on the market it would take 16 months to sell out what’s currently for sale. A normal market is considered to be a 4 to 6 month supply. Since we are selling more than last year and this “16 months” is the lowest absorption rate we’ve seen in many years, I would say this is another great sign that we are getting close to the end of the stagnant time.

The important thing to remember is, prices won’t immediately start to go up either. Appreciation takes time. So if your home is worth 15% to 20% less than what you would prefer to sell it for in today’s market, you could still be another 6 or more years away from getting your preferred price. And we don’t know what an interest rate hike could do to that time frame either. That kind of increase in value will take time, as it should, or we will only be setting ourselves up for another crash. Which I’m sure, nobody wants to experience again this soon if at all!

That being said, if you want to buy a great house, it may not last long. Especially if the home is priced right. If you want to sell your home, price it aggressively and the buyers will show up!

With cooler temps each Fall come higher sales numbers. Each year we see about a 25% increase in the number of sales versus the summer months. It’s pretty obvious with the majority of homes being occupied and unable to be viewed.

We also know that most buyers of second/investment homes will consider the purchase for anywhere from 6 months to 24 months before actually writing an offer. So it’s not uncommon for our summertime guests who decide to invest to re-visit in the fall and winter to purchase.

There are two main things I want to focus on in this update. First is the status of things now. Second, is the difference that 10 years and a very big cycle can make.

Status of the market right now:

(This info is for home sales only and compares September 2015 to September 2014)

The number of homes sold is up 11%

Average sales price is down 2%

Median sales price is up 4%

The number of homes in active inventory is down 11%

The bottom line? More homes are selling, prices remain the same and inventory is just now starting to go down. These are all very good signs for our market. This is an important step in the process to getting back to a normal, growing market. The process will still take a few years, but it’s good to be on the right track.

The reason this is so important is because we all remember still how good it was in 2004 and 2005 when prices were at their peak. We also have to remember these cycles don’t happen overnight. The impact of the market crash was tremendous. It will take a very long time to fully recover from it.

Consider the difference 10 years makes:

(This data compares the calendar year 2004 to 2014 for home sales only)

We sold 749 FEWER homes in 2014

We sold $589 million LESS in Volume in 2014

The average sale is 26% LOWER than it was in 2004

Median sale price is DOWN 28% from 2004

Days on Market – are up MORE than 2 months

Those are some pretty major differences. All in all what you need to know is if you’re ready to buy, prices and interest rates are definitely in your favor. If you’re thinking of selling, the market is very active and we can get the job done.

The last few listings I took sold in less than 30 days. When you price it right, it will sell.